Telecoms.com

a week in wireless

The golden years

The Informer imagines the walls of Greek operator OTE’s headquarters to be decked at present with soft focus posters extolling the various virtues of gardening, fishing, woodland walks and home baking. All those hobbies you never had time for during your working life but no doubt aim to enjoy once retirement comes around.

Just like in Logan’s Run, at OTE retirement is coming round sooner rather than later. The Council of Elders has released the Sandmen and put in place a scheme which is encouraging employees who are close to their retirement age to leave the firm.

The operator is reportedly looking to encourage up to 1,800 employees to “voluntarily retire,” a number representing approximately one-fifth of its total workforce. OTE has embarked on similar, smaller-scale voluntary retirement schemes every year for the past seven years.

“[This] will significantly and durably reduce our cost structure as well as enable us to rejuvenate our workforce,” said CEO and chairman Michael Tsamaz, who also had the task of announcing third quarter financial which saw revenues down 10.2 per cent year on year to €1.18bn, largely due to the economic climate in Greece as well as cuts to termination rates in many of the markets OTE operates in.

There was a more traditional slashing of heads at infrastructure vendor Ericsson, which is set to cut 1,550 jobs in its native Sweden. The announcement follows the firm’s third quarter earnings announcement, in which it saw a staggering 42 per cent year on year reduction in net income.

The vendor said that the cuts are aimed to “reduce costs, drive commercial excellence and operational effectiveness”. They will be made across all job areas, including sales, general and administration, research and development, supply and service delivery.

Sticking in Europe and the gloom hung over German operator group Deutsche Telekom also, as the firm posted a net loss of €6.9bn ($8.8bn) in 3Q12. The loss was largely attributable to charges incurred by T-Mobile USA resulting from the merger of its US operations with MetroPCS.

There was a flurry of activity in the States this week, not least because of the aftermath of Hurricane Sandy and the showdown between Obama and Romney that really went to the wire.

AT&T was splashing the cash, 14 billion greenbacks to be precise, to be spent over the next three years on a scheme dubbed Project Velocity IP, or VIP.

Detailing the project, CEO Randall Stephenson said that AT&T would be expanding its LTE network to cover 300 million people by the end of 2014, an increase to its original plan to reach 250 million. It also plans to reach an additional one million business customer locations with wireline fibre connections by the end of 2015, while its U-verse TV, Internet, and voice service will reach 85 million customer locations, an increase of about a third, by the end of 2015. Its U-verse offering will receive a speed boost to 75MBps, while its VoIP DSLAMs will be boosted to 45Mbps.

Stephenson said that small cell technologies would be used to increase the density and quality of its network and that it would continue to grow its spectrum offerings, which have already been bulked up with 40 spectrum deals in 2012.

AT&T has faced criticism for the move from some quarters, having told regulators during its failed bid to buy out T-Mobile USA last year that it would not be able to expand LTE beyond its 80 per cent coverage without the merger going ahead. At the time, the carrier expressed irritation at a report from the FCC that it would extend the network to 97 per cent of the network even without the merger, a prediction that has now proven to be the case.

The Informer wonders whether AT&T would have committed so much to its scheme had news from the FCC come out a little earlier. The carrier now faces a fine of $700,000 for overcharging its customers after unlawfully moving subscribers to more expensive data plans.

During the implementation of new tariffs in 2009, AT&T allowed existing PAYG smartphone subscribers to continue using data services without upgrading to a pay-monthly plan, as long as they did not upgrade to a different handset model. But many users got shifted onto $30 per month tariffs regardless and took their complaint to the FCC.

The USA is also writing the final chapter on another telecoms giant, soon to be consigned to the annals of history. Nextel, a staple brand even after the merger with Sprint, will be no more. As part of the recent $20bn investment from Softbank, Sprint Nextel is now obliged to drop the ‘Nextel’ bit of its moniker. Farewell push-to-talk pioneer.

Under another deal, Sprint has also agreed to acquire PCS spectrum and customers in the Midwest region of the country from regional operator US Cellular.

Sprint will acquire 20 MHz of PCS spectrum in the 1900MHz band in various Midwest markets and 10 MHz of PCS spectrum in the St Louis market. In addition, approximately 585,000 US Cellular customers will be transferred over to Sprint, which has paid $480 million in cash as part of the deal.

It’s all flowing one way at the moment isn’t it?

Well that’s certainly the experience of Spain-based operator group Telefónica at the moment, which has seen its revenue from Latin America overtake the revenue generated in Europe for the first time in its history. In its earnings announcement for the first three quarters of the year, the group said that sales in Latin America grew 5.9 per cent and now represent 49 per cent of the company’s total turnover.

Competition is hotting up in the southern hemisphere where Carlos Slim’s shade offers little respite from the climate. Slim’s Mexican wireless operator Telcel is rolling out LTE in the country, having tapped up Swedish kit vendor and long time partner Ericsson as a supplier.

The Amercia Movil-owned carrier switched on LTE in nine cities earlier this week, in Mexico City, Guadalajara, Monterrey, Queretaro, Puebla, Ciudad Juarez, Tijuana, Hermosillo and Merida, but intends to rapidly expand coverage over the coming months. Informa is predicting that Telcel will have 104,000 LTE subscribers by year-end.

Europe’s further behind in the LTE stakes, but Steely Neelie is still doing her bit. The European Commission (EC) this week called on all EU member states to make 120MHz worth of spectrum around the 2GHz frequency band available for 4G services, such as LTE, by mid-2014. The aim is to provide harmonised technical conditions to avoid market fragmentation in the future use of the band.

Dario Talmesio, principal analyst at Informa Telecoms and Media, welcomed the decision and labelled it a “very strong attempt by the EC to harmonise spectrum” for LTE services, but added that such a policy is long overdue.

“The main reason why 4G services are lacking in Europe is because of a lack of harmonisation of frequency bands. By opening up the UMTS spectrum, this will address the harmonisation issue, however, the spectrum bands are already fully utilised in most member states.”

Talmesio added that it will take time for operators to reap the rewards from liberalising this spectrum. It will still be two years before the member state governments will have to open the spectrum bands for LTE services, and then the refarming process will take time, given that a lot of resources have already been ploughed into UMTS services using the spectrum.

One of the big bugbears with LTE right now is battery life in devices. But do not fear, a chipset from semiconductor manufacturer STMicroelectronics is promising longer battery life for smartphones running on LTE. The company said that its ParaScan Tunable Integrated Capacitors (STPTIC) can electrically adjust the amount of energy transferred from the handset’s amplifier to the antenna to help maximise call performance when using multiple frequency bands, as is required by LTE handsets that have to switch between LTE and 3G radio networks.

Microsoft is also making a switch, having just absorbed its Live Messenger offering into Skype, after acquiring the VoIP service in May last year. The firm released Skype 6.0 for Mac and Windows a few weeks ago and has now told customers to update to the service to send instant messages and make video calls with their Messenger contacts.

Microsoft added that it will retire Messenger in all countries worldwide in the first quarter of 2013, with the exception of mainland China where it will continue to be available.

There’s that ‘retirement’ word again.

Thinking more along the lines of self termination, TV on demand darling Netflix has swallowed a poison pill in order to see off a prospective takeover from billionaire investor Carl Icahn, who you may remember from the Motorola saga.

Netflix is issuing rights to existing shareholders that will allow them to buy new stock in the company in the case of an unsolicited takeover. The scheme is designed to protect the company and its stockholders from unsolicited takeovers and “to enable all stockholders to realise the long-term value of their investment in Netflix”. The move comes after Icahn acquired a ten per cent stake in the online video rental operator last week.

There was a very interesting development from US software firm Microsoft this week, giving Windows Phone 8 users access to a sizeable global wifi network intended to improve the user experience and rein in data costs.

Microsoft has licensed software from Californian wifi offload specialist Devicescape to give Windows Phone 8 users access to the company’s Curated Virtual Network (CVN). This is a global wifi network of over 11 million wifi hotspots, mostly in the US, which have passed a strict assessment of service quality.

Devicescape’s CVN leverages crowd-sourced data from the millions of devices already deployed. Any device with the software installed will automatically sniff out more suitable hotspots and add suitable connections to the network. Devicescape can then partner with operators to offer the service to end users on a variety of pricing plans, although many carriers offer the service for free.

According to Thomas Wehmeier, principal analyst at Informa, the Devicescape tool will work nicely alongside Datasense functionality included in Windows 8.

Datasense is a toolset, unfortunately not integrated into all Windows Phone 8 devices, that helps users manage their data usage. With compression and monitoring Microsoft estimates that users can squeeze up to 45 per more out of their data plan. Verizon will be the first carrier to activate Datasense on the Windows devices it sells.

Wehmeier believes the offering will go some way to rectifying the shock experienced by many users of Windows Phone 7, which made much use of live tiles that required a data connection and did not offer much by way of control over those connections.

With Datasense and Devicescape, Windows Phone 8 promises to be a much better experience, potentially putting users more frequently in range of free to use public wifi hotspots.

Having launched in Germany this week, Swedish payment provider iZettle also tapped up Everything Everywhere, the UK operator owned by Orange and Deutsche Telekom, to be the exclusive distributor of the iZettle card reader in the UK.

Yet the commercial nature of the relationship between the two firms is unclear. Gerry McQuade, chief commercial officer for non-consumer mobile at EE declined to comment and iZettle founder Jacob de Greer told Telecoms.com only that “there is a business model in regards to the distribution of the readers but that is between us and EE.” He stressed the importance of EE’s retail presence as a distribution channel. “They have 297 stores across the UK, they have a great user base with lots of SMEs already, and they’re going for the same kind of merchants that we want to go for,” he said.

The exclusivity arrangement has a limited time frame, although neither firm disclosed its duration. While EE might have exclusivity over the sale of the card readers, which cost £20 and come with a £20 voucher redeemable against future transaction charges, and so are essentially free to the purchaser, the devices are compatible with handsets on any network.

The margins on payments are notoriously slim, with iZettle charging its merchants 2.75 per cent of the value of each transaction. Out of this slice the Swedish firm has to pay its merchant acquirers as well as derive its own revenue stream.

Chances are also looking slim for whoever it was that recently leaked an internal company memo at Cisco revealing details of the company’s bidding and contracting process.

Cisco vice president of services, Mike Quinn, who just happens to be a former CIA operations officer, believes that whoever recently leaked the memo committed corporate treason and violated trust. In an email – also leaked – sent to Cisco employees, Quinn invited the mole to voluntarily step forward, and adds that if no such surrender is made, “I will now make finding you my hobby.”

He then adds: “Ask around and you will find out that I like to work on my hobbies.”

It’s all a bit Liam Neeson in Taken isn’t it?

“I don’t know who you are. I don’t know what you want…What I do have are a very particular set of skills; skills I have acquired over a very long career. Skills that make me a nightmare for people like you…I will look for you, I will find you, and I will kill you.”

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